The marijuana industry includes companies directly related to the research, development, and distribution of cannabis products, as well as companies that indirectly support these operations. Traditional stock market indices like the Nasdaq continue to include more companies from the marijuana industry as a growing number of regions around the world legalize marijuana. The number of U.S. states that permit marijuana use in some form increased to 35 after voters in several states approved marijuana legalization initiatives on their ballots in the recent U.S. presidential election. Some of the Nasdaq-listed marijuana companies include Aphria Inc. (APHA) and OrganiGram Holdings Inc. (OGI). Many companies in this emerging industry are posting losses as they invest heavily to focus on rapidly expanding revenue. And many companies have been able to maintain revenue growth in spite of the COVID-19 pandemic.
On November 3, 2020, voters in New Jersey, Arizona, and Montana approved ballot measures to legalize recreational marijuana, and Mississippi has voted to legalize medical marijuana use. South Dakota, approved ballot measures to approve both.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have underperformed the broader market. MJ has provided a total return of 13.7% over the past 12 months, below the Russell 1000’s total return of 19.1%, as of January 19, 2021. All statistics in the tables below are as of January 20.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.
Best Value Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq with the lowest 12-month trailing price-to-sales (P/S) ratio. For young companies that have not reached profitability, this can provide an idea of how much business you’re getting for each dollar invested.
|Best Value Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||12-Month Trailing P/S Ratio|
|NIC Inc. (EGOV)||28.60||1.9||4.7|
|Village Farms International Inc. (VFF)||13.33||0.9||4.8|
|OrganiGram Holdings Inc. (OGI)||1.83||0.4||5.7|
- NIC Inc.: NIC is a provider of digital government services. It aids state and local government in providing various Internet-related services to business and citizens across the U.S. One of its technology platforms is designed to help governments regulate the marijuana industry.
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing standard vegetables like tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. On January 20, the company announced that it had closed a previously announced registered direct offering with certain institutional investors for the purchase and sale of roughly 10.9 million common shares for gross proceeds of approximately $135 million. The company plans to use the proceeds from the offering for general working capital purposes.
- OrganiGram Holdings Inc.: Canada-based OrganiGram Holdings is a holding company that, through its subsidiary, acts as a licensed producer of medical marijuana. For its Q1 FY 2021, ended November 30, 2020, OrganiGram posted a 23.1% year-over-year (YOY) decline in net revenue as well as a net loss of $34.3 million compared to net income of $0.9 million one year prior. The company attributed these results in part to significantly lower wholesale revenue from licensed producers and a lower average selling price.
Fastest Growing Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq with the highest YOY sales growth for the most recent quarter. Rising sales show that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.
|Fastest Growing Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|GrowGeneration Corp. (GRWG)||52.31||2.9||152.6|
|Cronos Group Inc. (CRON)||11.09||4.0||96.3|
|Canopy Growth Corp. (CGC)||33.56||12.5||75.0|
- GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products. The company operates retail hydroponic and organic specialty gardening retail outlets. It offers plant nutrition, farming soils, crops, advanced lighting technology, hydroponic and aquaponic equipment, and more. On January 11, the company pre-announced full-year 2020 revenue of $192 million, an increase of 140% over 2019. GrowGeneration also reported that Q4 2020 revenue grew by 142.1% YOY. At the same time, the company raised its 2021 revenue guidance.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils.
- Canopy Growth Corp.: Canopy Growth is a Canada-based, multi-brand producer of recreational and medical marijuana. On January 14, Canopy Growth announced that it had filed an early warning report with regulators in connection with the acquisition of an option to purchase roughly 1.1 million shares of TerrAscend Corp. The purchase is conditional upon changes to federal laws of the U.S. allowing the general cultivation, distribution, and possession of marijuana. If such a triggering event occurs, the company can exercise the option.
Marijuana Stocks on the NASDAQ with the Most Momentum
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
|Marijuana Stocks on the NASDAQ with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GrowGeneration Corp. (GRWG)||52.31||2.9||1,030|
|Amyris Inc. (AMRS)||11.35||2.7||282.2|
|Aphria Inc. (APHA)||13.61||4.3||158.3|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||13.7|
- GrowGeneration Corp.: See above for company description.
- Amyris Inc.: Amyris is an industrial biotechnology company that produces high-performance products for the health and wellness, clean beauty, and flavor and fragrance markets. The company uses cannabis in some of its consumer products.
- Aphria Inc.: Canada-based Aphria is a producer, supplier, and retailer of medical marijuana products. For its Q2 FY 2021, ended November 30, 2020, Aphria reported a 33.1% YOY increase in net revenue along with a net loss. Contributing to the net loss figure was the company’s acquisition of SW Brewing Company, LLC, in November.
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Nasdaq. “Organigram Holdings Inc. Common Shares.” Accessed Jan. 21, 2021.
YCharts. “Financial Data.” Accessed Jan. 21, 2021.
Village Farms International Inc. “Village Farms International Completes US$135 Million Registered Direct Offering.” Accessed Jan. 21, 2021.
OrganiGram Holdings Inc. “Organigram Reports First Quarter Fiscal 2021 Results.” Accessed Jan. 21, 2021.
GrowGeneration Corp. “GrowGeneration Preannounces Record Full-Year 2020 Revenues and Increases Preliminary 2021 Guidance.” Accessed Jan. 21, 2021.
Canopy Growth Corp. “Canopy Growth Announces Filing of Early Warning Report Regarding TerrAscend Corp.” Accessed Jan. 21, 2021.
Aphria Inc. “Q2 FY21 Financial Statements,” Pages 3, 12. Accessed Jan. 21, 2021.
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